CAUTIOUS OPTIMISM FOR EUROPEAN CAR INDUSTRY DESPITE FALLING SALES

Following a tough year for the European car market, there are faint signs of optimism for the industry going into 2011, as shown in the latest analysis from the world’s leading provider of automotive intelligence, JATO Dynamics.

Sales in Europe’s ‘Big Five’ markets of Great Britain, Germany, Spain, France and Italy all showed negative growth for November, however sales in Eastern Europe remain strong and continue to recover. New car sales across Europe as a whole are down 4.8% on 2009 levels, but despite this Great Britain and Spain look likely to end the year positively with sales up 3.4% and 5.9% respectively for the year to date.

November sales for six of the top ten brands in Europe were down compared to the same period last year. German premium brands continue to perform well, with BMW, Mercedes and Audi up 17.9%, 5.6%, and 3.1% respectively. Volkswagen retains the status of Europe’s best-selling brand for November, helped by the solid performance of its new Polo, which grew 11% compared to 2009.

November saw larger models perform well with strong sales for many Crossover and 4X4 vehicles. For example in the Crossover range, sales of the Volkswagen Tiguan and Land Rover Freelander were up 9.8% and 9.3% respectively while in the 4x4 range the Toyota Land Cruiser and Mitsubishi Outlander were up 38.3% and 43.1%.

David Di Girolamo, Head of JATO Consult, explains: “It has certainly been a tough year for the industry and while sales continue to fall in some markets, there is an emerging optimism about the coming year. However we should remain cautious of how we interpret these figures as many markets had temporarily high growth rates at the start of this year as Scrappage schemes came to an end.”

National Trends

Big five suffering

The ‘Big Five’ markets continues to show declining sales compared to this time last year. While Germany experienced the smallest drop in sales compared to last year, down only 6.2% compared to Spain’s 25.5%, sales over the year to date in Germany remain the least optimistic of all five markets, down 25.2%. This almost equates to the same number of vehicles registered in Spain year to date alone. 

Emerging optimism

Despite overall sales volumes being down 4.8% year to date, there is some optimism emerging as we near the end of the year with 20 of the 27 markets showing positive growth for the year to date. These positive figures, however, are likely to have been impacted by Scrappage schemes, which in many of these markets ended in the first quarter of the year.

Central and Eastern Europe continues to demonstrate strong sales growth in November compared to the same period last year. For example, sales in Lithuania were up 70% in November with Estonia and Slovakia up 42.5% and 35.5% respectively. As volumes in these countries continue to rise, they will become increasingly important to the recovery of the market as a whole.

David Di Girolamo comments: “While sales are still down across many markets compared to this time last year, there are some positive signs across the region, especially in Central and Eastern Europe, where the market is expanding.”

Brand Performance

Premium brands perform well

Of the top 10 brands BMW has shown the biggest increase in sales for the month, up 17.9% compared to the same time last year while Fiat has seen the largest decrease, down 27.7%. Volkswagen retains its place as Europe’s best-selling brand having sold 117,852 units in November while Toyota continues to miss out on a place in the top ten selling brands due to the strong performance of Audi.

GM appears back on track

Opel/Vauxhall has improved its sales performance to break into positive growth. The General Motors owned brand saw positive growth of 3.8% for November compared to last year, this is in comparison to a decrease of 19.9% the previous month.

Model Performance

New models hit the ground running

The Volkswagen Polo, Opel/Vauxhall Astra and the Citroen C3 were the only three models in the top ten to increase sales in November, up 11%, 12.6% and 9.7% respectively. The strong performance of new vehicles, such as the BMW 5 Series and Opel/Vauxhall Meriva, which grew 115.5% and 71.9% respectively, demonstrates the importance of investment in new models.